Forecasting Eye

 

At 11 am Beijing time on Monday 27 May Cebr will hold a press conference in Beijing to launch its report on the economic impact of the Belt and Road initiative. The report will be produced with Global Construction Perspectives and is sponsored by the Chartered Institute of Building.

 

One of the elements of the report is a comparison with one of the first extensive systems of infrastructure build by a superpower – the network of Roman Roads and other engineering works (particularly dams and aqueducts) built by the Romans.

 

The first Roman road was the Via Appia which was started (and finished) in 312 BCE. The first part joined Rome with Capua and was considered critical in enabling the Romans to subdue the Etruscans and the Samnites. The road was extended to Brindisium (modern-day Brindisi) in 264 BC.

 

Eventually, a network of 382 major roads was completed connecting Britain to Africa and the Middle East and connected with the Persian Royal Road. The network is estimated to make up 400,000 km of roads although only 80,000 km were paved.

 

The Roman road network was largely completed before the Christian era, though more were built in the 1st century AD. We have not made an estimate to cost the Roman road network but at today’s prices a km of non-motorway road costs at least $5 – $10 million,so the 80,000 km of paved roads might have cost up to $800 billion.

 

The Chinese Belt and Road project extends far beyond road infrastructure. It includes rail, energy, special development zones and urban transport systems. Eventually, it will almost certainly become more electronic than purely physical as roads are upgraded for autonomous vehicles and as digital infrastructure becomes part of the system. The projects identified so far will cost about $2 trillion but many more will follow.

 

The road parts of the project have been estimated to comprise 60,000 km of new or upgraded roads by the Mercator Institute for China Studies in Berlin. So the road part is actually smaller than the Roman road system.

 

But the most impressive aspect of the BRI is the combination of global reach and the speed with which it will come into effect. Most of the BRI system will be in place by 2040, implying a speed of building more than ten times faster than the Romans.

 

More interesting than the differences between the two systems are the similarities.The key point of the BRI is not just the physical and electronic infrastructure but the extent to which it makes trade around the world easier. The Roman roads were initially built for military reasons but eventually mainly existed to support and enhance trade. This is why the Cebr analysis of the BRI project has had to combine assessments both of the direct impact of the projects but also the extent to which they reduce trade frictions. Cebr’s pioneering work on the economic impact of reducing trade distortions has helped us quantify the economic impact (see https://www.mida.rs/demo/cebr/reports/us-china-brexit-its-all-about-international-trade-but-we-have-to-oil-the-wheels-at-home-too-domestic-and-export-markets-should-not-be-seen-as-separate/. These calculations will be released in a week’s time.

 

 

Contact: Douglas McWilliams dmcwilliams@cebr.com – 020 7324 2860.